Faculty Tensions II: Battling over Benefits
At the Faculty of Arts and Sciences (FAS) meeting on November 4, a rare standing-room-only crowd of professors raised objections to two recent University actions they associated with the central administration.
The second resulted in an outpouring of passionate criticisms of the changes in health benefits unveiled September 3, which will subject faculty members and nonunion staff employees in Harvard’s benefit plans to coinsurance and deductibles for hospitalizations, surgeries, and diagnostic imaging beginning in 2015—potentially exposing families to new costs of up to $4,500 per year. At the end of that discussion, faculty members present voted unanimously for a motion calling on the University to rescind the benefit changes.
The practical effect of the vote, if any, is uncertain: the annual open-enrollment period for benefit elections begins today and concludes November 19. But the criticisms revealed both substantive objections to the benefits themselves, and dissatisfaction about communication between the faculty and University administrators. This report covers the substantive and underlying issues, and provides some context for disagreements about decisionmaking generally—in recent years, and earlier.
(In accordance with FAS rules for coverage of its meetings, in the detailed accounts that follow, only speakers who have granted permission can be identified, quoted directly, or associated with paraphrases of their remarks. Where such permission has not been secured, the accounts remain anonymous; if permission is granted after publication, this account will be updated accordingly.)
A Question on Medical Benefits
During the October 7 FAS meeting, professor of history Mary Lewis rose to question the new health-benefits program, saying, “It’s asking those most at risk to pay more”—whether they or a family member contend with a chronic condition or suffer an acute medical problem. Imposing deductibles and coinsurance payments, she said then, undercut the insurance mechanism of spreading risk across populations. She asked how the new program design could be reversed.
Provost Alan Garber, to whom the University Benefits Committee (UBC) reports, responded at length. (The UBC is an advisory group of faculty members with healthcare expertise and administrators who have fiscal and management responsibilities in various schools and elsewhere.) Garber, whose scholarly field is studying the effectiveness of various healthcare procedures, said that the committee had spent the prior two and a half years examining the problem of rising health-benefits costs.
(When the benefit changes were promulgated in September, the community was told that benefit costs “have grown to consume 12 percent of the University’s budget [from 8 percent] over the past decade”—figures that proved, on subsequent analysis, to be technically correct for the decade beginning when the UBC started its latest review, but not solely because of health costs, and not during the most recent 10-year period.)
The UBC also worried about the need to prepare for future healthcare inflation, Garber said. Accordingly, the committee sought to moderate the growth in health costs by balancing the premiums Harvard and employees pay; protecting those covered from very high medical costs; preserving equity for lower-income employees (through reimbursement of part of out-of-pocket costs); and better delivering high-value care. The balancing act resulted in an expected decline in premium costs for 2015 (versus a projected increase), and higher costs borne by employees who incur higher medical expenses—but with caps of $1,500 per individual and $4,500 per family per year. The result was not perfect, the provost said, but he felt it was a useful step toward sustaining generous health coverage. The committee had rejected the alternative of offering a low-premium insurance option that funneled beneficiaries into narrower networks of low-cost providers. (One political problem for Harvard, in medically expensive Massachusetts, is that some of the highest costs are associated with its renowned, affiliated teaching hospitals, particularly in the Partners network led by Massachusetts General and Brigham and Women’s hospitals.)
Lewis said that the result still felt “regressive,” and worried particularly about the “real difficulties” the increased financial costs might impose on junior faculty members. The community ought to absorb the costs on their behalf, and on behalf of lower-paid staff members, she said.
A Motion against the New Health Plan
In preparation for the November 4 meeting, Lewis advanced this resolution for faculty debate:
That for 2015 the President and Fellows be asked to replace the currently proposed health care benefit plan with an appropriately adjusted version of the 2014 health benefit package, maintaining the 2014 plan design.
The motion was followed on the agenda with these explanatory notes from Lewis:
• In effect this motion aims to institute a moratorium on the proposed changes, particularly in light of the fact that the UBC’s recommendations were based on inaccurate assumptions as to how and when benefits costs rose as a proportion of the overall university budget. Costs rose over a decade ago (between 2002 and 2004) but have remained largely flat as a portion of the budget since.…This information was not accurately conveyed to the UBC. The policy change was instituted as a fait accompli, without allowing opportunity for FAS faculty deliberation. More information and a more inclusive and transparent process are needed before any changes are instituted. Along with procedural issues, the proposed design plan is problematic for the following substantive reasons:
• The proposed plan transfers risk from the group to the individual. That is a fundamental departure from previous plans, under which individuals with chronic conditions or those unfortunate enough to face unanticipated medical emergencies were protected under group coverage.
• The proposed plan is regressive in heavily penalizing the most vulnerable members of our community: junior faculty, faculty and staff with families, women planning to have children, older employees, and those with chronic conditions. The plan’s “protections” to mitigate costs to employees with lower salaries are insufficient to offset the significant new financial burdens that may be incurred.
• The proposed plan affects not just “overusers” of health care, but anyone unlucky enough to be confronted by sudden, unexpected medical problems in any given year, or anyone who needs expensive diagnostic testing that is not considered “routine” under the new plan.
• In effect the proposed plan will constitute a severe pay cut for those in need of health care. It shifts financial burdens onto faculty and staff at the very moment they are most in need of protection: when they fall ill.
The Debate Joined: “Harvard Can and Should Do Better”
Thus warned that the faculty would take up the motion for debate, opponents and proponents of the benefit plan came to the meeting prepared. Lewis led off with a sharp, passionate statement:
It is wonderful to see so many people here and so many colleagues who have taken time from their sabbaticals to return for a discussion as important as this one. Your presence here is a reminder that Harvard University is, as President [Drew] Faust just said a few minutes ago [during an earlier part of the FAS meeting], a community of ideas and ideals; we are not just a business; we come together when it is ethically vital to do so; we don’t just clock-in hours. Indeed, the conferral of honorary degrees upon new faculty and newly tenured faculty [earlier in the meeting] is a time-honored ritual of coming together as a community of scholars. It was in recognition of the communitarian spirit of Harvard University, that I submitted the motion that is before you.
At the October FAS meeting, I asked President Faust how and when the recently announced health benefits policy could be reversed. In the wake of posing that question, I have been contacted by scores of faculty and staff from several different schools thanking me and sharing their anxieties about the impact this policy may have on them. It is this outpouring of concern that prompted me, in consultation with a number of colleagues from whom you will hear in a moment, to submit the motion that is before you. The hour is late, and we have a long list of faculty who wish to speak….I am sure many of you also want a chance to speak. So I will try to be as brief as possible.
Tomorrow is the first day of open enrollment and if you have not yet examined your benefits enrollment guide in detail, I suggest that you do so. When you do, you will notice that your premiums are going down, in my case by exactly $10/month. More critically, your out-of-pocket expenses—the newly instituted deductibles and coinsurance—are going up, by as much as $1,500 per individual and $4,500 per family per year. If you make less than $95,000 per year, these caps are adjusted somewhat. But either way, in all but the healthiest years, you are likely to experience a pay cut of some sort, and one that is determined solely by your medical luck.
Why did the University make this change? Many reasons have been offered, none of which is very compelling. We’ve been told that the university’s health benefit costs are rising relative to salaries; in fact, the University’s health benefit costs as a proportion of total expenditure over the last six years have been quite flat. Indeed, nationwide, the medical rate of inflation has gone down for the past five years and only recently has it shown a very slight uptick. The administration warns us that health care costs might rise more in the future, so we should plan ahead. Of course, they might also fall; does the University plan to refund us some of our out-of-pocket expenses in that eventuality? In all seriousness, though, it is quite possible that costs will not rise dramatically; and yet the University is locking in this change now.
… Finally, the provost has suggested that if this reform had not been enacted, we would have experienced an increase of 3.6 percent in our premiums. 3.6 percent of my premium would have been $15 more per month for me; and about $37 more per month for Harvard, if the same contribution ratios had been maintained. Since insurance is about managing risk, I would have willingly spent more per month in premiums in exchange for some peace of mind.
We don’t actually know if increasing premiums without adding deductibles or coinsurance was considered by the University Benefits Committee because the entire process has been shrouded in mystery. My purpose in mentioning this is not to discount the hard work the UBC members put in, but to ask why the committee did not build in consultation with the people who would be most affected, why it is so hard to discover anything about what the committee was asked to do, how much money will be saved, and what the alternatives were. In short, we still don’t really know how we got to this plan. It is also clear that it has been implemented in a most precipitous way. When I checked earlier this afternoon, the detailed plan guides available on the University benefits website were for last year’s plans, not the proposed plan. We’re frequently told that reforms such as Harvard’s are designed to allow us to become better health-care consumers. I don’t know about you, but when I make momentous decisions about my healthcare, I like to be an informed consumer.
Harvard can and should do better.
Harvard could do better by ensuring that caring for one’s health is less stressful and uncertain, so we can focus on what we’re here to do: produce new knowledge and teach the brightest minds in the world. The beauty of the old system was that you knew what to expect so you could focus on healing or having a baby. You knew that whatever tests, procedures or surgeries your doctor ordered would be covered. In 2015, by contrast, all but the most routine tests will trigger deductible and coinsurance payments, the cost of which you sometimes will not know until the test or procedure is complete.
If the University had announced that it was instituting a pay cut for all faculty and exempt staff with chronic illness in their families, plus those who contracted illness, got pregnant or sustained an accident, it would have sounded absurd, but it would have been more honest. Moreover, this pay cut will be timed to come at precisely the moment when you are sick, stressed, or facing the challenges of being a new parent. To be fair, the University cites various protections for “lower income” employees that will be put into place. Yet, if you are in the two “lower” income brackets, you will have to pay up to the same caps as the best-paid employees at Harvard, save your receipts, and then have the difference reimbursed after you’ve already paid the hospital. Why should people as vital to Harvard’s mission as post-docs or non-union staff front the University money while potentially defaulting on their own bills as a result?
Is Harvard a business that transfers costs to its employees, reducing its expenses by shifting the burden to people coping with serious illness? Or is Harvard a community where we equitably share the risks that we all face as human beings and where health care is a human right?
If Harvard were just a business, it would not offer such generous financial aid to middle class students and their families. Indeed, Harvard always has been more than a business. Let us keep it that way.
It is too late to offer rationalizations for this plan; that could have happened months ago through a process that included a broader spectrum of faculty and staff in the decision-making process; since that did not happen, we ask for a moratorium.
Lewis then attempted to introduce follow-on speakers, but President Drew Faust, as chair, reserved that power to herself, and designated Watts professor of health care policy Barbara McNeil—chair of the department of health care policy at Harvard Medical School (HMS) and a member of the UBC—to speak next. She, UBC chair Michael Chernew, Schaffer professor of health care policy, and Joseph P. Newhouse, MacArthur professor of health care policy and management (another UBC member), had written an op-ed in the morning’s Harvard Crimson, “Why the Health Plan Changed,” to which she referred.
Addressing healthcare costs, she noted that faculty members had received a graph from the provost, detailing the rise of employee-benefit costs from about 8 percent of Harvard’s expenses in fiscal year 2001 (correcting the earlier date, referred to above) to about 12 percent in fiscal 2004, and the oscillation of that ratio between 10 percent and 12 percent through fiscal 2013. She observed that costs had been held within that relative range in part because of changes made following UBC analyses: consolidation of healthcare providers to focus on more efficient ones and to enhance Harvard’s bargaining leverage with each; shifting the share of premium costs slightly from the University to employees; and so on. She acknowledged that the communications “could have been a little bit clearer and more concise and timely about the changes that have been made over time.”
McNeil then introduced a new set of data. From fiscal 2008 through fiscal 2013, she said, the University’s spending on healthcare coverage (including dental insurance) compounded at an annual rate of 6.8 percent. Excluding dental costs, the growth rate during those years was 7.5 percent annually. Healthcare costs, including dental coverage, represented about 5 percent of total compensation costs (wages and salaries, plus benefits) in fiscal 2001; 6 percent in fiscal 2003; 7 percent from fiscal year 2004 through fiscal 2010; and 8 percent in fiscal years 2011 through 2013. (Fiscal 2014 financial data for the University will be released later this month; it is unknown whether a comparable ratio for the healthcare component of compensation costs will be made public.) In light of this growth, she continued, Provost Garber had charged the UBC with finding ways to “ameliorate” the cost increases; the committee had done so, drawing on representation from every faculty, with help from a consultant, and analyzing Harvard’s experience and benefit programs relative to those of peers. The committee had worked long and hard, analyzing myriad ways “to cut down the expenditures to the University.” The benefit design that resulted was credible, and in keeping with the offerings of peer academic institutions.
Lewis’s and McNeil’s statements set the tone for the ensuing debate, largely along the lines of individual faculty members’ experiences, concerns, and worries about the effects of benefit changes on lower-paid staff members, junior colleagues, and so on, compared to economic and policy analyses presented to explain the UBC’s advice to the provost.
Before proceeding to those exchanges, the data points McNeil presented merit some analysis; the format of the faculty meeting did not lend itself to that kind of pause and reflection. Harvard has not disclosed its actual dollar spending on any specific category of employee benefits—which include health and dental insurance, retirement plans, disability coverage, presumably subsidies for daycare and other related services, and such large line items as the employer share of Social Security and Medicare payroll taxes (which automatically rise with incomes). Allowing for rounding (the percentages are very likely approximations):
- For fiscal 2010, applying 7 percent to total compensation costs (wages and salaries of $1.363 billion and employee benefits of $0.426 billion) yields estimated University healthcare costs of $125 million: 3.4 percent of total Harvard operating expenses. For fiscal 2013, applying 8 percent to the same cost lines in that year ($1.553 billion and $0.507 billion) yields estimated healthcare costs of $165 million: 3.9 percent of total operating expenses.
- That aggregate spending is not adjusted for the size of the workforce. Employment data, formerly published in the University fact book, no longer appears to be available, but the workforce is assuredly larger than it was in fiscal 2010, during the height of fiscal stringency and after selective layoffs, buyout and other retirement incentives, and severe limits on hiring. It is known that the workforce has grown from about 15,200 full-time equivalents during 2009 to about 16,600 in 2013 (employment has been rising about 2 percent annually). So some per capita adjustment in that apparent $40-million increase in Harvard’s healthcare expense from fiscal 2010 to fiscal 2013 is warranted.
- Finally, starting points may matter. The increase in the proportion of total compensation costs accounted for by healthcare costs after fiscal 2010 may reflect, in part, the widespread salary and wage freezes in effect for many faculty and nonunion staff members during fiscal 2010, to adjust the University’s spending to its reduced endowment: as benefit costs continued to grow, their share of compensation expense would necessarily rise. In the years since, increases in nonunionized staff and faculty members’ wages and salaries have been relatively tightly compressed to a couple of percentage points per year, perhaps compounding the shifting effect. Members of the Harvard Union of Clerical and Technical Workers (the leading staff union) have in fact received larger wage increases, which would offset this effect somewhat—but they also have more generous, negotiated healthcare benefits, which might tend to reinforce the relative growth of health spending in Harvard’s overall compensation expense during this period.
The first faculty speaker to rise in support of Mary Lewis’s motion was Wells professor of political economy Jerry R. Green. On Election Day, one had to admire the political savvy of enlisting him to the cause.
As an economist, he could engage in discourse with the healthcare economists on the UBC as an equal. And for faculty members and administrators with a longer memory, it was Green, then provost, whom President Neil L. Rudenstine asked to lead a task force to “review Harvard’s employee-benefits package and recommend ways to bring costs under control” (as this magazine reported in March-April 1994)—in an era when medical and dental expenses had risen from $16.2 million to $41.7 million, a 21 percent annual growth rate. (Ironically, on a facing page, the magazine reported the merger of Mass General and Brigham and Women’s to form their network—the focus of contemporary concerns about the cost of medicine in metropolitan Boston.) In June 1994, the Corporation adopted changes in health and other benefits to the tune of $10 million—including cutting contributions to faculty pension plans and setting off protests about inadequate consultation at the FAS faculty meeting that November. Before then, as the magazine reported, Green had left the provostship; declined to sign the report of the benefits committee; and criticized the recommendations as both inefficient and counterproductive (because they might discourage faculty retirements). And during the year, FAS set about establishing a benefits-review committee, the precursor to the UBC, intended to be a consultative body for such changes in the future.
Summarizing his work as a microeconomic theorist who has focused on studying risk, insurance, incentives, behavior, and their implications for policy, Green addressed the introduction of a coinsurance element in Harvard’s benefit plan—“a significant new financial risk” borne by those who have medical problems. He would, he said bluntly, eliminate that provision and instead raise premiums, a step that would have employees bear the costs, in aggregate, that the new plan intended those who incur coinsurance to bear, without raising the University’s costs at all.
The impact of coinsurance, he said, depended on its design. Because Harvard’s new provision aimed at hospitalization, surgery, and diagnostic testing, it was hard to predict its effect on the utilization of medical services. But the effect was likely to be “financially and medically undesirable.” Unless utilization of services changed, there would be no savings—so the success of coinsurance, from the University perspective, depended in putting financial pressure on families at precisely the wrong time. If coinsurance did change utilization, might beneficiaries defer procedures or tests, resulting in worsened health complications in the future, and higher costs? He referred the audience to Eckstein professor of applied economics David Cutler’s Your Money or Your Life (reviewed here) as a primer on the keys to health: timely diagnosis, follow-up appointments and care, compliance with medications and other treatments, and active management of chronic conditions. All are disincentivized by coinsurance.
Behavioral research, Green continued, indicated that “people do not choose wisely.” If they already engage in wishful thinking, delay addressing problems, and so on when they are anxious about an illness, coinsurance reinforces the counterproductive behaviors. Imposing coinsurance constitutes “unfair, unnecessary, random transfers of wealth”; would not cut costs; and could have tragic health outcomes. Green won loud applause.
Joseph Newhouse, who conducted the most famous controlled experiment on the effects of cost-sharing, spoke next, reminding the faculty of the tension between moral hazard (use goes up when costs go down, as insurance coverage is extended) and the transfer of risk. From all evidence, he said, increasing coinsurance both reduces use of care and increases risk for beneficiaries. But as his experiment, on a population comparable to Harvard employees, had shown, the reduced utilization of medical services had “no effects on health.” Excluding routine doctor visits and similar interventions (such as prescriptions)—which are not affected by the changes in Harvard’s benefit design—people who are hospitalized less are less exposed to hospital-induced infections and errors. This observation prompted laughter, but Newhouse and other speakers noted the evidence on the very large incidence of such adverse outcomes from medical treatments (and evidence that many other medical services are simply ineffective). He also noted that increases in commercial insurance costs are much higher than those in public programs (Medicare and Medicaid, with regulated rates and government purchasing power), raising the specter that Harvard could run into the Affordable Care Act’s 40 percent excise tax on high-cost insurance programs at some time in the future.
Alison Frank Johnson, professor of history (who is also shouldering the demanding role of leading FAS’s effort to revise its policy and procedures for cases of sexual assault), told about receiving a call on September 23 from her two-year-old’s daycare center: he was running a fever, she would have to fetch him. A doctor visit ($20 copay) progressed from looking for an ear infection to revealing a low oxygen level to an emergency-room visit ($75 copay) to overnight hospitalization. That night, as her child was breathing through a mask, she was communicating with colleagues to reschedule a graduate seminar, office hours, and a presentation the next day, managing her other children, and coping with her fears. But, “I did not have to ask myself where I would find $1,500,” she said, nor how that would work compared to paying the mortgage, utility bills, or daycare expenses.
Although she is a tenured professor and lives in a three-bedroom house in Arlington (a near-in suburb with what passes for less unreasonably stratospheric housing costs, in Greater Boston’s punishing market) and sends her children to public schools, Johnson continued, she does not end the month with $1,500 readily available in her bank account. If that was her situation, what would it be like for employees who are paid less? She could earn more as a consultant, she said—work she in fact had done. But she came to the University to do academic work. If Harvard now considered full healthcare coverage a luxury, she said, the solution was to work to make it available to others, not to “deny ourselves.”
Enders University Professor Marc Kirschner, chair of the systems biology department at HMS, offered a perspective different from that of his health-policy colleagues in Longwood. Speaking on behalf of several HMS faculty colleagues, chairs, and staff members “who are uneasy” about the changes in the benefits plan, he said, “I recognize that others at Harvard had the best intentions in trying to stretch the University dollars so that other priorities could be met” (among them, likely, sustaining medical research, at a time when federal sponsored funding is under great pressure). But, he continued, “the plan that was announced fell particularly hard on vulnerable populations. It is a pay cut whose impact depends on how poorly you are paid, and young families with children bear the greatest burden. Although the poorest-paid staff have not been subjected to the pay cut yet because they are in the union, there is a category of very poorly paid employees that will suffer the cut this year—postdocs, most of whom are paid under $50,000.”
Kirschner said that postdocs facing coinsurance of up to $1,500 per person would have to apply for reimbursement from the University, and “This is a large number for those whose take-home pay is less than about $3,000 per month.”
As for the principle of cost-sharing (the deductibles and coinsurance that raise employees’ cost of using medical services at the point of service), he said, “I don’t believe that paying for health care for your sick child in an anxious moment is morally equivalent to an impulsive purchase of expensive clothes.”
And as for Harvard’s internal reputation and fairness, Kirschner turned toward Xander University Professor Douglas Melton, recently celebrated for breakthrough stem-cell research aimed at treating Type 1 diabetes. He said, “I know that much of the work was done by poor hardworking postdocs, who because of their low pay are specifically disadvantaged by the new healthcare plan. President Faust, if our criticisms are in error, then we would all like to be enlightened, but the more we read the policy and the more we see it defended, the more it seems like a serious mistake, unworthy of our great University.”
Provost Garber thanked the preceding speakers, and returned to the broader financial context. The UBC, he said, indeed sought to lower healthcare costs borne by Harvard—for good reason. He noted that in the recent FAS annual report, dean of administration and finance Leslie Kirwan projected an $81-million operating deficit for the faculty in the current fiscal year—and other faculties have deficits, too. “There are some real financial challenges,” Garber emphasized, raising serious questions about how to pay for Harvard’s essential work.
About the purportedly deleterious effects of increased medical cost-sharing, he observed, most peer universities have such policies in place, and most U.S. employers have much more extensive cost-sharing than Harvard has proposed. Garber had studied with Jerry Green, he said, but Green had presented a theoretical argument. Newhouse’s study provided empirical evidence that higher cost-sharing reduced the use of care and its overall cost, “with no adverse effect on health” in populations like Harvard’s. That sounded counterintuitive, Garber said, but the laughter that greeted such observations did not come from doctors (Garber is a physician), who knew only too well about the incidence of infections and errors induced in hospital settings. Fears that increasing employee costs would reduce health are “not borne out by the data.”
The University, he said, took concerns about health outcomes very seriously. The UBC had drawn upon “extraordinary expertise” and thought through the changes in benefits “very carefully,” but Garber realized that the plan design was “not perfect” and could be improved in future years. Harvard had asked its medical providers to make changes to reduce costs and improve care, but they were not able to do so for 2015. Nonetheless, “We will never rest,” Garber said, in pursuit of securing the best possible access to high-quality care. Doing so, he continued, was not easy in the context of Greater Boston’s high costs. The UBC had examined narrower networks, but determined that that possible change would be a bad outcome for the Harvard community.
The time for the regular faculty meeting having expired, those present voted to extend the discussion by 20 more minutes.
A faculty member from one of the quantitative disciplines rose to critique the administration’s claims about rising healthcare costs and the threat they posed, in the long term, to sustaining good employee benefits. He might as well commit suicide, he said, because “my being alive now is unsustainable.” If costs accelerate in the future, they could be addressed then. For now, the new plan design was proceeding in “unseemly haste.”
Returning to Mary Lewis’s monthly calculation, he said that continuing the 2014 benefits program into 2015 would cost Harvard $35 monthly for its contribution to his health insurance. But to save that, he said, the University chose to adopt a cost-sharing plan that would distract faculty members from teaching and research as they worried about coinsurance and deductibles; punish junior faculty members during the most critical phase of their careers; and damage the University’s appeal as a place for professors to come to work. At the very time Harvard sought to attract and support young women faculty members in scientific and technological fields, he said, the new plan design would have a “disproportionate effect on women.” In all these senses, he said, the imposition of coinsurance and deductibles “destroys a huge amount of value” in return for the University’s $35 monthly savings in its healthcare costs for faculty members in his situation.
Higgins professor of geochemistry Charles Langmuir extended the analysis, saying that compensation overall accounted for a decreasing share of the University’s operating expenses—so, “Where’s the problem?” He and 10 colleagues had gone back into the payroll system and discovered that since fiscal 2006, Harvard’s costs for health insurance had in fact inflated much more slowly than individual employees’ costs (about 3.5 percent per year vs. 5.5 percent per year, respectively). He attributed the phenomenon to “bracket creep” (the employee share of premiums is progressive) and prior changes in benefits (such as the general shift of more premiums to employees). How could that situation be “sustainable” for employees, Langmuir asked, and “unsustainable” for their University employer?
With coinsurance and deductibles in place, he warned, elderly faculty members, those who become ill, and those who are pregnant could expect their healthcare costs to increase 30 percent to 50 percent in 2015.
In the meantime, the University could make data on benefit plans much more readily available, rather than forcing professors to spend valuable research time to exhume it, and could “answer questions without changing the subject.” He urged administrators to be transparent, share information, and then, “Let’s talk about it.”
Lisa McGirr, professor of history, the last speaker, ended the debate on a high-speed, high-decibel, emotional note. The new benefit design, she said, “undermines the very principle of insurance: spreading risk across the whole community.” To the extent it is justified by the fear of future costs, there is ample time for transparent discussion before imposing plan changes. During the October 7 meeting, FAS dean Michael D. Smith, summarizing his annual report, had highlighted advances in diversifying the faculty and attracting women, but noted departures by junior faculty members in the sciences before their tenure reviews. Given that such junior professors must navigate their professional challenges and childrearing simultaneously, McGirr said, “This benefit policy moves in the wrong direction” for that cohort especially. A new mother faces a $1,500 payment for medical services during delivery, and could easily face another, equal coinsurance payment if the newborn has any complications—an “onerous financial burden” under circumstances that are not rare. Because women in their thirties to fifties use more healthcare than others, the new benefit design is “a gender and family issue.” Such issues required “a transparent discussion before benefits change.”
At that point, faculty members versed in parliamentary procedure called the question, moving the debate to a vote on the motion before time for the meeting expired. By voice vote, the motion carried unanimously.
Aftermath and Assessment
As noted, the practical implications of the faculty’s vote are uncertain. Employees need to elect their benefit choices annually, and to enroll accordingly—not only for health, life, and disability insurance, but for flexible-spending accounts, which expire each year. The two-week period for doing so is now under way, on the basis of information provided to employees by mail and online. And then the University has to process and effect their elections, during an unusual period when it is making a transition to new pharmacy-benefits and flexible-spending plan administrators.
Nor is it the case, at Harvard or elsewhere, that nonunion employees have much of a say about, or a binding vote on, their benefits. Uncompetitive benefits will over time render an employer unable to attract or to retain desirable employees—but the accommodation is largely through people voting with their feet.
And certainly faculty members are sensitive about the value of their benefits, as is anyone who works for a living and has to depend on America’s crazy-quilt system of providing health coverage. So it is unsurprising that they would turn out in large numbers, and be vocal, in response to the abrupt transition from no coinsurance or deductibles to plans that would potentially expose them to costs big enough to get their attention. The skirmishes in 1994 are ample precedent for that.
Finally, it should be noted that FAS and the provost have crossed swords with regularity. It was he who
- communicated the plans to consolidate the University’s prized libraries, downsizing staff, during a period of great concern about budgets for acquiring materials, support for expert bibliographers, and other worries;
- told professors, by forwarded e-mail, at the end of the 2011-2012 academic year that their customized financial-planning services were being terminated;
- unveiled plans to relocate much of the School of Engineering and Applied Sciences to Allston—plans that, though widely embraced now, were at the time described in anger by senior faculty members of the school who said they had been consulted in a perfunctory manner, or not at all (one characterized the decision as dropping “the Allston bomb” on the school); and
- led Harvard’s partnership with MIT to form edX for online learning technologies—a $30-million investment, at a time of presumed financial constraint, that was unveiled in the spring of 2012 but without benefit of a publicly disclosed faculty advisory group until one was announced well into the next winter, in early 2013.
One of the faculty’s own, Carswell professor of East Asian languages and civilizations Peter Bol, was the respondent to Harry Lewis’s question, earlier in the November 4 faculty meeting, about teaching research that impinged on the sanctity of the classroom—without soliciting teachers’ or students’ consent. But he spoke in his capacity as the provost’s designated leader for HarvardX and the teaching and learning initiative.
Disagreement between faculty members and administrators is inherent in any university. On many issues, ranging from benefits to the libraries, from HarvardX to the enormous undertakings in Allston, the provost is, in Drew Faust’s administration, the point person. He has a lot on his plate. He has a lot of challenging decisions to make. And as he notes, the University is simultaneously pursuing very ambitious agendas while watching its purse. It cannot make his work more pleasant, nor strengthen the way the community operates, if the interactions between the provost and the FAS become routinely fractious.